Opel will shorten workers' hours in restructuring

FRANKFURT -- Opel has reached an agreement with unions to trim working hours and offer early retirement packages.

The deal is aimed at cutting costs after PSA acquired the money-losing automaker from General Motors earlier this year.

Opel said it has agreed with IG Metall to trim hours in the engineering and administration departments for at least six months starting Jan 1.

Starting April 1, the work week will also be shortened to 35 hours, Opel and PSA said in a statement Friday.

The agreement also covers a joint structure for the purchasing organizations of Opel and PSA's brands to cut costs by increasing economies of scale.

In the long term, 30 percent of savings from the integration of Opel into PSA will stem from procurement, it said.

"It is our common goal to make Opel competitive," Opel CEO Michael Lohscheller said in the statement.

As part of the agreement, employees born between 1957 and 1960 will be offered the possibility of early retirement. Workers close to retirement age will be offered a package to leave the automaker immediately.

Opel did not say how many workers would be affected. The company employs over 37,000 people, including more than 19,000 in Germany, according to its website.

PSA CEO Carlos Tavares had signaled possible cost cuts at Opel, noting in a newspaper interview in October that production costs were at least 50 percent higher than at the group's French factories.

Tavares has also said a failure of turnaround efforts at Opel would spell "very serious" consequences for workers at the German division and the company as a whole.

PSA has given Opel until 2020 to return to profit as part of a recovery plan aimed at shifting the brand's model lineup onto PSA's architecture, with the French parent pursuing 1.7 billion euros ($2 billion) in savings from its purchase of Opel.